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ROCKETFUEL BLOCKCHAIN, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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02/13/2020 | 02:39pm EST

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain statements that are "forward-looking" within the meaning of the federal securities laws. These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.

The words "anticipate," "believe," "estimate," "expect," "intend," "will," "should" and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, and are not guaranties of future performance. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or using other similar expressions. We are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Important factors that could cause actual results to differ from our predictions include those discussed under "Risk Factors," "Management's Discussion and Analysis" and "Business." Although we have sought to identify the most significant risks to our business, we cannot predict whether, or to what extent, any of such risks may be realized, nor can there be any assurance that we have identified all possible issues which we might face. For all of these reasons, the reader is cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date hereof. We assume no responsibility to update any forward-looking statements as a result of new information, future events, or otherwise except as required by law. We urge readers to review carefully the risk factors described in this Quarterly Report and in the other documents that we file with the Securities and Exchange Commission. You can read these documents at www.sec.gov.



Overview


RocketFuel was formed on January 12, 2018 for the purpose of bringing highly efficient check-out systems to eCommerce. We are currently developing innovative check-out systems based upon blockchain technology and designed to increase speed, security, and ease of use. We believe that users of RocketFuel's systems will enjoy a seamless check-out experience compared to current online shopping solutions. We believe that with RocketFuel's technology, online merchants will be able to implement new impulse buying schemes that are unavailable in present day eCommerce sites.

On June 27, 2018, we consummated the Business Combination and related transactions contemplated by the Contribution Agreement. Pursuant to the Contribution Agreement, B4MC issued 17,001,312 shares of its $0.001 par value common stock to the Sellers in exchange for a 100% ownership interest in us, resulting in 22,668,416 post-merger shares of B4MC common stock issued and outstanding.

On June 29, 2018, we filed a Current Report on Form 8-K with the Securities and Exchange Commission which fully describes the transaction set forth herein.



Critical Accounting Policies


Our significant accounting policies are described in Note 3 to the financial statements as of March 31, 2019 which are included in our Annual Report on Form 10-K. Our discussion and analysis of our financial condition and results of operations are based upon these financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In the past, actual results have not been materially different from our estimates. However, results may differ from these estimates under different assumptions or conditions.



  10







Results of Operations


For the Three Months Ended December 31, 2019 vs December 31, 2018



Revenues


We had no revenue generating operations during the three months ended December 31, 2019 and 2018.

General and Administrative Expenses

General and administrative expenses for the three months ended December 31, 2019 were $36,719 as compared with $80,555 for the prior year period, a decrease of $43,836 or 54.4%. The decrease is primarily a result of the recording of $50,000 in stock-based compensation during the three months ended December 31, 2018 for services provided by a consultant which did not reoccur during the three months ended December 31, 2019.

For the Nine Months Ended December 31, 2019 vs December 31, 2018



Revenues


We had no revenue generating operations during the nine months ended December 31, 2019 and 2018.

General and Administrative Expenses

General and administrative expenses for the nine months ended December 31, 2019 were $105,807 as compared with $3,329,632 for the prior year period, a decrease of $3,223,825 or 96.9%. The decrease is primarily a result of the recording of $3,204,208 in stock-based compensation for stock options to our chief financial officer and a consultant for services during the nine months ended December 31, 2018.

Liquidity and Capital Resources

As of December 31, 2019, we had cash of $5,807 as compared to $19,486 as of March 31, 2019.

During the nine months ended December 31, 2019, we had net cash of $113,679 used in operating activities, which was composed of our net loss of $105,807 and a decrease in accounts payable and accrued expenses of $7,872. During the nine months ended December 31, 2018, we had net cash of $2,220 used in operating activities, which was composed of our net loss of $3,329,632 and offset by (i) the recording of $3,204,209 in stock-based compensation for stock options to our chief financial officer and a consultant for services; and (ii) an increase in accounts payable and accrued expenses of $127,643 primarily for legal and accounting fees and the effect of the reverse merger transaction.

During the nine months ended December 31, 2019, we had net cash of $100,000 provided by financing activities from the issuance of 100,000 shares of our common stock to an investor. During the nine months ended December 31, 2018, we had net cash of $29,695 provided by financing activities, which was composed of (i) the repayment of $305 of related party advances, and (ii) the issuance of 7,500 shares of our common stock to one investor in consideration of $30,000 in cash.

Our financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We incorporated our business on January 12, 2018. During the nine months ended December 31, 2019, we reported a net loss of $105,807 and negative cash flows of $113,679 from operating activities. As of December 31, 2019, we reported negative working capital of $64,495. As a result, management believes that there is substantial doubt about our ability to continue as a going concern.

Prior to June 27, 2018, management was engaged in efforts to identify and negotiate a transaction with a public company quoted on the OTC Markets having shell status where a contemplated transaction would be treated as a reverse merger. On June 27, 2018, we consummated a transaction as contemplated by that certain Contribution Agreement made and entered into as of June 27, 2018 by and among B4MC Gold Mines, Inc. ("B4MC"), a Nevada corporation, and us. Pursuant to the Contribution Agreement, B4MC issued 17,001,312 shares of its $0.001 par value common stock to us in exchange for a 100% ownership interest in us resulting in 22,668,416 post-merger shares of B4MC common stock issued and outstanding. We financed our efforts to consummate this reverse merger transaction through the issuance of equity securities. In October 2018, we issued (i) 12,500 shares of our common stock, having a fair market value of $4.00 per share, or $50,000, in consideration for business advisory services, including research distribution services; and (ii) 1,250 shares of our common stock to an investor (the "Investor") at $4.00 per share in consideration for $5,000 in cash. In November 2018, we issued an additional 6,250 shares of our common stock to the Investor at $4.00 per share in consideration for $25,000 in cash. We will require additional financing in order to continue to develop our product and execute on our business plan. However, there can be no assurances that we will be successful in raising the additional capital necessary to continue operations and execute on our business plan.



  11







Commitments


We do not have any long-term commitments at December 31, 2019.

Off-Balance Sheet Arrangements

At December 31, 2019, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

© Edgar Online, source Glimpses

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